Virginia transportation commission can rack up ‘unlimited’ debt

BLANK CHECK?: Transportation commission can rack up an unlimited amount of debt with little oversight.

PURCELLVILLE, Va. — Taxpayer advocates are saying a new regional transportation commission will be able to rack up limitless debt with little oversight.

If Gov. Terry McAuliffe approves, a 21-member board will decide how $200 million in regional sales and gas taxes will be spent on transit projects in the Tidewater area, according to HB 1253, and SB 513.

The Transportation Accountability Commission, which would start July 1, alsowould have authority to issue bonds and levy tolls, with little oversight, critics say.

There doesn’t seem to be too many check and balances on how much debt the committee can amass, said Maurice McTigue of the Mercatus Center at George Mason University, referring to general-obligation and revenue bonds.

The problem with general-obligation bonds is they count against the bond ratings of all of cities under the commission’s authority, said Reid Greenmum, a member of The Virginia Beach Taxpayer’s Alliance.

“Now you have people not in your city racking up debt in the name of your city,” Greenmum said.

The bill doesn’t define what would happen if the Tidewater region has trouble paying the debt. Experts worry the state will have to step in if the localities default.

It seems as though the Legislature has given to the commission the right to incur debt on behalf of the state, McTigue said.

Decisions by the commission don’t need to go through the normal channels of scrutiny in the legislative process.

“I wouldn’t use the words ‘blank check,’” McTigue said. “But the only constraints (on the commission) are from the organizations that are providing the members of the commission.”

The commission is allowed to levy tolls on any existing bridge or tunnel, and the bill fails to put limitations on how much the tolls can be or how long they can be collected.

McTigue outlined two potential problems with this:

There is a risk the tolls don’t terminate when the project is fully paid, and the commission uses the revenue for another purpose.

Tolling revenue may not be sufficient to service the debt it approves. “If that happens, who is responsible?” he asked. “Cities and counties, or the commonwealth?”

Greenmum suggested the commission should be required to hold a referendum before setting tolls or raising existing ones.

“If the bills are rewritten to require a lot more referendum, then the people who live there could decide on whether or not they wanted to spend that money,” Greenmum said.